What we need is a good-better-best approach to digital content

Paramount is out with a new online service that lets customers purchase clips from films. As this New York Times article notes, it’s initially aimed at advertisers and marketers who want to use the clips in campaigns. Consumers will be…

Paramount is out with a new online service that lets customers purchase clips from films. As this New York Times article notes, it’s initially aimed at advertisers and marketers who want to use the clips in campaigns. Consumers will be let in on the action later.

I have a couple thoughts on this:

1. Kudos to Paramount for giving this a shot. It certainly can’t hurt, and we need all the experimentation we can get.

2. I think this is a fantastic opportunity to test good-better-best quality levels. I’ve long thought there’s a way to service different segments of the audience through resolution, features and convenience.

For example, writers, bloggers and others who simply want to reference a clip could grab a lower-resolution version for free (as many already do through YouTube). This boosts awareness and creates branding opportunities for the content provider.

One sidenote: The Times piece suggests folks on the low end — consumers, mostly — may have to pay a low per-clip fee. That’s the wrong move. These aren’t ringtones. Ringtones are a public expression of personality linked to an always-on, always-available device. Embeddable movie clips require placement within media forms, be it a website or a DVD. The all-important personality element is muted. I’m not going to shell out cash if that so-bad-it’s-good movie clip only broadcasts my ironic sense of humor to a limited audience. I need exposure, dammit!

But I digress …

Moving up the scale, companies that want to aggregate clips or make them available as part of another content product could pay a reasonable amount (likely a flat rate for a certain number of clips) and gain access to DVD-quality content. I can see utility here for the education world. A one-stop shop for clips could take a lot of the pain out of the copyright quagmire law-abiding teachers currently face.

On the high end, marketers and advertisers who need full-resolution (1080p, if available) and the absence of co-branding would pay a premium.

What won’t work is an “everyone must pay” declaration. I’m assuming that since this got written up in the Times, and given that a consumer option is part of the longer-term gameplan, Paramount wants this to be more than a back-channel marketers’ tool. Otherwise, why publicize it? This is clearly a public-facing product. As such, it needs to properly service the unique needs of all audience segments.

The glory of a thought process, as illustrated by John A. Byrne

John A. Byrne is leaving BusinessWeek to start a new business (not exactly a newsflash, I know). I generally don’t care much if a bigwig leaves a position to venture out on his or her own. That happens all the…

John A. Byrne is leaving BusinessWeek to start a new business (not exactly a newsflash, I know). I generally don’t care much if a bigwig leaves a position to venture out on his or her own. That happens all the time. But Byrne is different. BusinessWeek, for all its financial trouble, has a phenomenal web presence, and much of that was built under Byrne’s watch. He’s also a guy who inherently understands the power of direct communication with the audience. Just take a look at his Twitter feed. How many editors engage like that?

And then there’s this …

In a blog post announcing his new venture, he articulates the beliefs that guide his thinking about digital content:

I have three fundamental beliefs that inform my thinking: 1) Print advertising will never come back. There are just too many options for advertisers today and too much pressure on rates. Sadly, success in print will be measured in single-digit declines, forever. 2) Online advertising will never offset those declines nor save print. There’s far too much competition online and far too much available inventory; and 3) Users will not pay for content, unless they’re convinced it has immediate and tangible value. Very little journalism meets that standard today. Do we really need 57 versions of a story on Bernie Madoff pleading guilty?

That’s a beautiful paragraph. Here’s why:

  1. He’s dead on.
  2. It illustrates the type of structural thinking that turns vague ideas into real businesses. We need more editors and publishers who work this way. Big ideas and grand plans cannot stand on their own. They have to be crammed into a structure — a mental furnace that burns away assumptions. Otherwise, all you’ve got is brain-based vaporware. That useless, fluffy business school nonsense that gets retweeted, and buzzed, and expanded into book form. We’ve got enough of that.

I speak from experience with this structure stuff. I used to wander aimlessly through the “future of content” world, distracted by shiny new things and influenced by flavor-of-the-week thinking (I once thought micropayments were totally going to happen … ugh.) But six months ago I decided to map out my own structure for all this digital disruption business. The result is this. I have no idea if it has any value as an actual business model, but the writing process forced me to hone and articulate the thousands of rants and opinions brewing in my head. Now, when I’m confronted with a new idea or perspective, I can feed it into this structure and quickly examine the various angles. It’s helped me tremendously. I’ve got my footing now.

Content isn’t going away, so calm down [Quote]

Testify, Mike: Eventually, as these new business models and new institutions work themselves out, it’ll suddenly seem “obvious” what the right answers were, and people will forget the hundreds if not thousands of different experiments — both good and bad…

Testify, Mike:

Eventually, as these new business models and new institutions work themselves out, it’ll suddenly seem “obvious” what the right answers were, and people will forget the hundreds if not thousands of different experiments — both good and bad — that went into developing the new model. It’s a time of upheaval, for sure, but there’s no indication that there’s any real risk to the production of content. Just a few businesses that got big and don’t want to change with the times.Mike Masnick, TechDirt

Naturally Scarce Products Call “Shotgun.” Advertising, You’re in Back

In an interview with CNBC, Gary Hoenig, general manager for ESPN The Magazine, says the economic downturn put advertising in the hot seat: … the overdependence on advertising is a real crutch for media and this is an opportunity for…

In an interview with CNBC, Gary Hoenig, general manager for ESPN The Magazine, says the economic downturn put advertising in the hot seat:

… the overdependence on advertising is a real crutch for media and this is an opportunity for us to actually get to the consumer and say, “Hey, what are you willing to pay for”?

The advertising conundrum is something I’ve run up against throughout my career. In an odd way, my focus on Web content forced me to confront the detriments of advertising earlier than my print and broadcast comrades because Web ad rates have always been low. The rest of the industry is learning what Web folks already know: ad revenue kinda sucks.

When I started to conceptualize a sustainable model for online content businesses — a project I’ve been working on for quite a while — I pushed advertising to the back burner. It’s still present, and money can certainly be made in the online ad realm, but it’s a rickety foundation for a content business. That’s why I diversified the revenue streams across naturally scarce products (education, consulting, research, in-person events), sponsorships, and advertising. The aggregate is far more stable than advertising alone.

And speaking of that sustainable model for online content businesses project: each section includes a comments area, and I welcome all suggestions and criticisms. The model’s fundamental concepts aren’t original, and I’m certainly not positioning this as anything revolutionary. Rather, it’s a collection of ideas, theories and guidelines that I collected over the years and arranged into a structure. What it becomes and where it goes are up in the air, but I found the organization and writing process quite useful. The framework helps me parse the vast number of perspectives and innovations I run across.

“User” and “Customer” are Different Animals In the Freemium World

The New York Times’ recent piece on Evernote inadvertently cracked open an important question in the “freemium” discussion: What’s the difference between a user and a customer? The language attached to freemium business models requires specificity because these businesses associate…

The New York Times’ recent piece on Evernote inadvertently cracked open an important question in the “freemium” discussion: What’s the difference between a user and a customer?

The language attached to freemium business models requires specificity because these businesses associate expectations with distinct user groups. With freemium, there’s a vast canyon between free access (users) and pay access (customers); they are not synonymous. That’s why the following clarifications are necessary:

User — A visitor who accesses a site, product or platform, but does not pay. Example: I use Dropbox, but I don’t pay for the top-tier services (yet …)

Customer — A converted user who now pays for premium access or services. Example: As my storage needs increase and I become more reliant on Dropbox, I’ll likely convert into a paying customer.

I realize this entire post teeters on nitpicky semantics, but heated debates require clear boundaries.

Sidenote: I highly recommend the Times’ Evernote story. It’s a great representation of the opportunities and obstacles that come with freemium models, and it has actual numbers.